The decline in the housing market is becoming more and more real; however, the housing index has yet to fully reflect the risk of the potential for still slower housing growth numbers. In some cases such as Ryland's (RYL), new home sales were recently below 2004 levels. Thus, when we look at the Housing Index ($HGX), we find prices are now poised to correct their recent gains and still more. We foresee the index dropping from it's current 262 level all the way back to 200.
We are short the homebuilders, and we want to become shorter.